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4 posts from December 2008

December 16, 2008

Heil Fuhrer, for you Tommy ze investment iz over....

A salutory lesson on why cash-flow is king, always has been, always will be.

This video nails the danger of relying on capital growth and equity release.


December 11, 2008

French Connection would say BMV is FCUKed!

I am just pondering if the term "BMV" is D.E.A.D. ...?

It seems to me that it might be.  Why?  Because, in the current market conditions, no one knows the AMV (actual market value).  It is completely unquantifiable.  We can no longer use comparables, as these change on a weekly basis, the market is falling so rapidly.

Perhaps it is time to coin a new phrase?  I propose QoD.  The "quality of the deal". 

Everyone is buying at discounted prices (I even buy cars BMV but in that world it’s AMV or QoD).  Even  home owners (as opposed to investors) know that there are serious discounts to be had and are making silly offers.  By default, therefore, BMV is now AMV!.

Based on this, the emphasis of the deal should be on the QoD as in will it make money every month (MMeM) and is it what tenants want (WTW) based on their demographic.

Sorry if I am putting the cat among the BMV pigeons, but I believe I am making a valid point… either that or irony.

Irony:-

1: a pretense of ignorance and of willingness to learn from another assumed in order to make the other's false conceptions conspicuous by adroit questioning ―called also Socratic irony

2 a: the use of words to express something other than and especially the opposite of the literal meaning.

3: incongruity between the actual result of a sequence of events and the normal or expected result.

To conclude:- BMV is DEAD asap because it's not PC. What we need is QoD based on MMem and WTW ... now if people did this we would have no SFM's acting like SPO's and using NMD.

French Connection would say BMV is FCUKed!

December 10, 2008

How the Financial Crisis Was Built Into the System

I found this the other day, quite interesting especially the analogy with Zimbabwe.

~ Robert Kiyosaki

 

How did we get into the current financial mess? Great question.

Turmoil in the Making

In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It’s estimated that those seven men represented one-sixth of the world’s wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.

In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting. Interestingly, the U.S. Federal Reserve Bank isn’t federal, there are no reserves, and it’s not a bank. Those seven men, some American and some European, created this new entity, commonly referred to as the Fed, to take control of the banking system and the money supply of the United States.

In 1944, a meeting in Bretton Woods, N.H., led to the creation of the International Monetary Fund and the World Bank. While the stated purposes for the two new organizations initially sounded admirable, the IMF and the World Bank were created to do to the world what the Federal Reserve Bank does to the United States.

In 1971, President Richard Nixon signed an executive order declaring that the United States no longer had to redeem its paper dollars for gold. With that, the first phase of the takeover of the world banking system and money supply was complete.

In 2008, the world is in economic turmoil. The rich are getting richer, but most people are becoming poorer. Much of this turmoil is directly related to those meetings that took place decades ago. In other words, much of this turmoil is by design.

Power and Domination

Some people say these events are part of a grand conspiracy, and that might well be. Some people say they represent the struggle between capitalists, communists and socialists, and that might be, too.

I personally don’t participate in the debate over a possible global conspiracy; it’s a waste of time. To me, the wider struggle is for power and domination. And while this struggle has done a lot of good — and a lot of bad — I just want to know how to avoid becoming its victim. I see no reason to be a mouse trying to stop a herd of elephants from fighting.

Currently, many people are suffering due to high oil price, the slowdown in the economy, loss of jobs, declines in home values, increased bankruptcies and businesses closings, savings being wiped out, the plummeting stock market, and rising inflation. These realities are all direct results of this financial power struggle, and millions of people are its victims today.

An Extreme Example

I was in South Africa in July of this year. During my television and radio interviews there, I was often asked my opinion on the world economy. Speaking bluntly, I said that South Africans had a better opportunity of comprehending the global turmoil because they’re neighbors to Zimbabwe, a country run by Robert Mugabe.

In my interviews, I said, “What Mugabe has done to Zimbabwe, the Federal Reserve Bank and the IMF are doing to the world.” Obviously, my statements disturbed many of the journalists. I did my best to comfort them and assure them I was not an anarchist. I explained, as best I could, that Zimbabwe was an extreme example of an out of control power struggle.

After they were assured I was only using Zimbabwe to illustrate my point, I said, “If you want to understand the world economy, take a refugee from Zimbabwe to lunch.” I advised them to ask the refugee these questions:

1. How fast did the economy turn?

2. When did you know that you were in financial trouble?

3. When did you finally decide to leave Zimbabwe?

4. If you could do things differently, what would you have done?

Three Approaches to a Crumbling Economy

I spoke to three young couples from Zimbabwe while I was in South Africa. Two couples were recent refugees now living in South Africa, and one couple still lives in Zimbabwe. All three couples had interesting stories to tell.

One couple said that they would have quit their jobs earlier. Instead, they hung on, hoping the economy would change. Then, virtually overnight, the value of the Zimbabwean dollar dropped and inflation went through the roof. Even though they received pay raises, the couple couldn’t survive and soon depleted their savings. They left Zimbabwe by car with almost nothing. If they could’ve done something differently, they told me, they would have started a business in Zimbabwe and began exporting products to South Africa, so that they would have had South African currency and a bank account there before they fled.

The second couple that fled the country said they saved money and paid off their house and other debts even as the Zimbabwean dollar fell in value. Looking back, they say they would’ve saved nothing and gotten deeply in debt in Zimbabwe, allowing them to pay off their debt with the cheaper dollars. Instead, they fled after they lost their jobs, leaving behind their house and owning $200,000 in nearly worthless Zimbabwean dollars.

The third couple still lives in Zimbabwe. When they saw the writing on the wall, they set up a business in South Africa and, with the profits, began acquiring tangible assets in Zimbabwe. Often, they’ll buy an asset in Zimbabwe and pay the seller in South African currency. They believe that once Mugabe is gone and order is restored, they’ll be in a strong financial position.

Many Problems, Few Solutions

There are three major problems with the events of 1913, 1944, and 1971. The first is that the Fed, the World Bank, and the IMF are allowed to create money out of nothing. This is the primary cause of global inflation. Global inflation devalues our work and our savings by raising the prices of necessities.

For example, when gas prices soared, many people said that the price of oil was going up. In reality, the main cause of the high price of oil is the decreasing value of the dollar. The Fed, the World Bank, and the IMF, like Zimbabwe, are mass-producing funny money, thereby increasing prices and devaluing our quality of life.

The second problem is that our economic crises are getting bigger. In the 1970s, the Fed faced and solved million-dollar crises. In the 1980s, it was billion-dollar crises. Today, we have trillion-dollar crises. Unfortunately, these bigger crises mean more funny money entering the system.

Apocalypse Soon

The third problem is that in 1913, the Fed only protected the large commercial banks such as Bank of America. After 1944, the Fed, the World Bank, and the IMF began bailing out Third World nations such as Tanzania and Mexico. Then, in 2008, the Fed began bailing out investment banks such as Bear Sterns, and its role in the Fannie Mae and Freddie Mac debacle is well known. By 2020, the biggest of bailout of all will probably occur: Social Security and Medicare, which will cost at least a $100 trillion.

Even if we find more oil and produce more food, prices will continue to rise because the value of the dollar will continue to decline. The dollar has lost over 90 percent of its value since the Fed was created. The U.S. dollar will continue to decline because of those seven men on Jekyll Island in 1910.

Granted, the funny-money system has done a lot of good — it has improved the world and made a lot of people rich. But it’s also done a lot of bad. I believe somewhere between today and 2020, the system will break. We’re on the eve of financial destruction, and that’s why it’s in gold I trust. I’d rather be a victor than a victim.

Here is the original:
How the Financial Crisis Was Built Into the System

December 01, 2008

The Slight Edge

4walls logo new

As 2008 draws to a close, some might say it’s a time for reflection.  At 4Walls, we say it’s a time for ACTION!.

One question you might ask yourself, if you are in “reflection” mode is:  What's the difference between success and failure? 

The answer is the “slight edge”.

What is the slight edge?  It’s the small things you do consistently which compound over time to create your success or failure.  This can apply to all areas of your life, including health, relationships, career, money, etc.

Let's say you're deciding what to eat.  You might choose a McDonald's burger or you might go for a healthy salad.  That decision probably won't change your life today.  But if you choose the burger every time you make that same choice then, over time, it will negatively affect your health.  Conversely, choosing the healthy salad regularly will positively affect your health.  Both are examples of the slight edge at work, one example working for you and one working against.

What are most people going to do in December?  Nothing.  They'll start to wind down and convince themselves they will get started again in January.

But what do the smart people do? They fill the vacuum left by the people who have already shut up shop, picking up deals and having key meetings with people, meaning they will hit the ground running in the New Year.

This is a great example of the slight edge at work.  There’s still time left this year to nail some fantastic deals, like we have.  Most solicitors can still complete on deals by the 19th December.

"It’s in the moments of decision that we shape our destiny".

Keep your momentum going now, so that you can hit the ground running in the New Year.

Networking is vital to your success as an investor, and there are still many networking events or meetings to be had before the end of the year to get you set up for a successful 2009.

Ask yourself:  what are you doing to give yourself the “slight edge”, now, in 2009, and beyond ... ?

Thanks to our friends at www.justpropertynetwork.com for the tip about the “slight edge”.

P.S. "The Slight Edge" is a book by Jeff Olson.  You can find it here


The Slight Edge: Secret to a Successful Life